On
the eve of one of the greatest Christian holidays, the bright Christmas, and on
the threshold of the New Year, I would like to address all employees and
customers of “Bulgarian State Railways” EAD. To the workers and staff within
the railway system and their families I wish health and luck, personal and
professional success in 2011! I would particularly like to thank every
colleague for the professionalism, diligence and devotion, which they put into
their work in the course of the current year!

Traditionally, on the eve the of the bright Christmas season
everyone looks back to those events which have marked both in terms of
professional and personal perspective the particular character of the passing
year. For BDZ EAD the year 2010 was a year of challenges and even at its very
beginning we had to deal with difficulties and problems. More than once the
accidents, which occurred in the railways and which tested the faith in the
professionalism of railway workers, brought, thankfully, no further grave
consequences. Still, those accidents have happened to remind us of the number
of unresolved issues, which will continue to be in the focus of our attention
next year as well.

I am convinced that as good professionals, all of us are
well aware of the faults in our work. BDZ EAD is one of the largest companies
in Bulgaria and each professional failure has impact over the functioning of
the whole railway system. The good image of the railways is built with the
effort of each and every railway employee and the professional attitude of all
BDZ EAD staff determines the public perception of the company.

There is some hard work for us to do in 2011! We must
restore public trust in the reliability of railway services, we need to make
active efforts to attract new customers and we should manifest in practice that
we have learned our lessons from the mistakes of inertia, irresponsible
performance of office duties and passive expectation that problems will be
resolved by someone else.

“Bulgarian State Railways” EAD will enter into 2011 with a
new organizational structure which will provide better interaction between the
separate units in the railway system and will outline clearly the
responsibilities, results and achievement of each activity.

I do believe that we can deal with the challenges only when
we are united by a common objective, namely – to make BDZ EAD a modern railway
company. Let the issues, which each of us faces in everyday work, make us wiser
and let the difficulties we overcome make us stronger! I am convinced that if
this is our guiding principle in both professional and personal life, we shall
work and live as dignified, confident and proud people!

Let me extend my special gratitude to all customers and
partners for the good cooperation and wish them professional and personal
success in 2011! I trust that the reform in the sector will contribute for the
more proactive and mutually beneficial development of our relations with the
Bulgarian business community and the general public.

Merry Christmas and Happy New Year, dear colleagues and
customers!

Eng. Pencho POPOV

Executive
Director

Greater interest in Plovdiv – Burgas railway line project

The
second opening of bids for the project “Rehabilitation of railway
infrastructure along the sections of Plovdiv - Burgas railway line”, held on
9th November in the Head Office of SE NRIC, manifested a greater interest of
both foreign and Bulgarian companies in this project. At the first bidding,
held on 11th February and annulled on 14th June due to the large difference
between the project tentative costs (BGN 330 million before VAT) and the
financial offers of the competing bids (BGN 426.229 million before VAT), there
were eight companies and consortia, while now the bidders were twelve.

The bids were opened by a commission, headed by eng. Zlatin
Krumov. The procurement assignments were separated into three different lots
and the bidders could bid for both the total of the three assignments or for
each separate lot.

Lot 1 – Rehabilitation of Mihailovo - Kaloyahovets
railway line section, including the main tracks at Mihailovo and Kaloyanovets
stations. The approximate overall length is 21 km. The implementation term is
19 months.

Lot 2 – Rehabilitation of Stara Zagora - Yambol and
Zavoy - Zimnitsa railway line sections, including the main tracks at Stara
Zagora and Yambol stations as well as at all stations and halts between them.
The approximate overall length is 120 km. The implementation term is 38 months.

Lot 3 – Rehabilitation of Tserkovski - Karnobat
railway line section, including the main tracks at Tserkovski station. The
approximate overall length is 122 km and the implementation term is 43 months.

The bidders for the project implementation are as follows:

1. Consortium between the Austrian concern SWIETELSKY
and the Bulgarian company RVP Koehne AD (which is part of RAILWAY
INFRASTRUCTURE – HOLDING COMPANY AD), bidding for Lots 1,2 and 3;

2. Athens-based company AKTOR (the largest
construction company in Greece, member of ELLAKTOR Group), bidding for Lots 1,
2 and 3;

3. Consortium between the Italian construction
company BALDASSINI - TOGNOZZI - PONTELLO COSTRUZIONI GENERALI S.p.A. (ÂÒÐ),
which is based in Florence, and the Bulgarian company GLAVBOLGARSTROI AD,
bidding for Lots 1, 2 and 3;

8. Consortium between the Italian company SALCEF
S.p.A., based in Rome, and the Bulgarian company ENERGOREMONT,
bidding for Lots 1, 2 and 3;

9. Consortium between the Italian company GENERALE
COSTRUZIONI FERROVIARIE (G.C.F. S.p.A.), based in Rome, and the Bulgarian
companies SK 13 and TRACE RAILINFRA (daughter-company of TRACE
GROUP HOLD AD), bidding for Lots 1, 2 and 3;

12. Consortium “European railways”, which
includes the Spanish companies COSTESA S.L. and COPASA S.A., as well as
the Bulgarian companies SOFSTROI AD and PONSSTROIENGINEERING
(which is part of PONS HOLDING), bidding for Lots 1, 2 and 3.

The winning bidders for each separate lot should be selected
by 15th January 2011 at the latest.

The indicative budget for this project is EUR 187.365
million, 64% of which comes as grant funding from the Cohesion Fund of the EU
under Priority axis 1 of Operational Programme “Transport” 2007 - 2013 and the
remaining 36% will be covered by the national budget.

The base tunnel of the modernized railway line Radomir -
Gueshevo

Eng. Margarit ZHIPONOV

Radomir
– Gueshevo railway line is a main connection along Trans-European corridor No 8
and the project “Technical assistance for the modernization of Radomir –
Gueshevo railway line” should identify the necessary investments and form the
basis for the tender documentation for the next modernization phases. After the
completion and approval of the “Feasibility study” phase in April, the designer
team continued with the elaboration of three new scenarios of the design
project which are developed along the corridor of Scenario 2, from Radomir to
Kopilovtsi, and Scenario 3, between Kopilovtsi and Gueshevo.

The employer (MTITC and SE NRIC) was presented with the best
option for the track alignment, which is Scenario 7. It surpasses the remaining
options (scenarios 5 and 6) in terms of return on investment and technical
solution. The line length till the axis of the building of Gueshevo railway
station is 72.5 km (while the current track is 88.6 km long). This scenario
envisages the construction of 16 tunnels and 37 multi-span railway trestle bridges
and conventional bridges.

Geological survey of the line path was performed in the
summer and autumn of 2010. The recommended Scenario 7 envisages the
construction of 16 tunnels. Tunnel No 2 (14.9 km long) will be bored with a
mechanized tunnel excavation equipment at the front of which will go the tunnel
boring machine. The wider implementation of new security standards for longer
tunnels has established the practice of excavating single-track tunnel tubes
with an adjacent tube of smaller diameter for the evacuation of people in case
of emergency. At the railway tunnel tube there will be evacuation exits at each
250 meters. The designed longitudinal gradient is 12 ‰, which is the optimum
for long tunnels. The use of a tunnel boring machine necessitates the
implementation of circular cross-section and advance availability of reinforced
concrete segments. The geological and geo-mechanical conditions favor this
method for the boring of the tunnel as the quantity of rock in the soils is
moderate. The path alignment through Tunnel No2 has been selected very
appropriately in terms of geological engineering. It also takes into account
the complicated geological and tectonic structure of the region.

If the line path is shifted westwards, it will have to go
via a pronounced karst region in the proximity of the erosion basis of Struma
river, which would mean that in the karst there will be weak sections and
possible strong influx of karst waters.

If the line path is shifted eastwards, it will fall in the
proximity (according to the geological and tectonic maps of the region) of
large tectonic transform faults at the boundary between the so called Zemen
monoclynal and Koniovski negative graben. This means that part of the tunnel
could fall into large tectonic faults where subsidence of large masses of
tectonic strata and occurrence of water-filled rock milonitized (clayey)
materials is highly probable. There also is a risk of a strong influx of water.

Taking into consideration the above-described geological and
tectonic conditions, the proposed line path goes through a section with
relatively monolithic materials, low karst occurrence, at a sufficient distance
from a strong karst process and large tectonic faults, with a low probability
of water influx.

The Austrian trade commission in Bulgaria and the Austrian – German
corporation SCHENCK PROCESS organized at end-November an expert presentation of
state-of-art weighing and diagnostic systems, which are widely used all over
the world and can significantly boost the efficiency of Bulgarian railways. Mr.
Michael Angerer, Commercial Counselor and Trade Commissioner within the
Austrian Embassy in Sofia, attended the event. SCHENCK PROCESS was represented
by Martin Stillger, Vice President for Transport Automation; Herbert Hartl,
Executive Director of SCHENCK-Austria, and Josef Frauscher, Sales Engineer. On
the Bulgarian side, it was the top management of STRAIL BULGARIA &
RELASTECT as official representative of SCHENCK in our country which took part
in the presentation. A number of leading experts in the transport sector, among
which was the Director General of SE NRIC, eng. Milcho Lambrev, attended the
event in proof of the high interest in the topic of the presentation.

Weighing equipment, which is currently used
in our country, includes about 120 technologically outdated fixed scales, built
before the 80s of the 20th century. This technology does not allow the weighing
of compositions during operation but only the weighing of separate wagons,
positioned at a dedicated weighing track in the vicinity of a given station. In
such a situation weighing time amounts to 5 – 7 minutes, it requires detachment
of the wagon from the composition and securing it against unplanned movement,
it is necessary to allocate personnel and a shunting locomotive for these
operations, etc.

SCHENCK MUTLIRAIL systems perform precise
weighing of each individual wagon in a composition during operation (at speeds
of up to 15 km/h).

Recent new developments in the railways,
the great diversity of rolling stock, projections for Ro-La transports to be
performed over one and the same infrastructure make it necessary to implement
diagnostic facilities for railway operational safety. These aim at both the
prevention of damage infliction upon railway infrastructure and the improvement
of criteria for train routing assessment and cost optimization. It becomes
possible to determine the quality level of railway vehicles and infrastructure
loading. Given the ongoing increase of operational speeds and the ever-growing
need for safe route access, it is necessary to detect risks, related to rolling
stock, in a timely manner with the help of a reliable equipment as well as to
prevent potential failures of infrastructure facilities.

Diagnostic weighing systems can identify
with their sensors all types of railway vehicles in operation in Europe as well
as their axle bearings and brake systems. If mechanical defects occur in a
given axle bearing, it can become over-heated due to excessive friction and
result in train derailment. This is the reason why it is necessary to control
the dangerous overheating of axle bearings and wheel tires as well as of brake
discs of railway rolling stock. If the system detects some danger it transmits
a signal to the operational unit. It can also monitor rolling stock and cargo
gauge, fire risks, improperly loaded or overloaded wagons, etc. All these
functionalities of the system will enhance safety levels, provide for railway
transport security and ensure the European level of service quality.

In Brief

Minister Tsvetkov launched operation
“Without ticket”

The transport minister, Alexander Tsvetkov,
initiated a large-scale operation, starting on 22nd October, to check if passengers
travel with valid transport documents in the trains. The controls are performed
jointly by BDZ employees and Transport police officers. The aim of the
operation is to curb fare evasion in the trains. The controls are expected to
have a preventive effect upon passenger and train crew malpractices, when
ticket collectors accept money from the passengers without issuing a travel
document.

Minister Tsvetkov signed a memorandum
with Korea

On 26th October during his visit to the
Republic of Korea, the transport minister Alexander Tsvetkov signed with his
Korean counterpart Chung Jong Hwan a Memorandum of Understanding which binds
the two ministries to perform exchanges and cooperation in the sector of
transport infrastructure construction. The two ministers agreed upon the
establishment of two working groups – for railway transport and for transport
infrastructure. In Busan the Bulgarian delegation visited the XVII World
Congress for Intelligent Transport Systems and met representatives of the
high-speed train producing company Hyundai Rotem Co.

Two new stations to provide connection
to the Underground

According to the CEO of Sofia-based
“Metropoliten” company, Stoyan Bratoev, and Sofia Mayor, Yordanka Fandakova,
two new railway stations will be constructed to provide connection to the
Underground for incoming passengers from Pernik and Plovdiv. One of the new
stations will be in Gorna banya residential district and the other – next to Underground
station No21 in Druzhba residential district.

Tender for Septemvri – Plovdiv railway
section

On 2nd November SE NRIC launched an open
procurement procedure for the assignment “Modernization of Septemvri – Plovdiv
railway section, part of the Trans-European railway network”. The objective is
to achieve interoperability and train speeds of 160 km/h. The deadline for
submission of bids is 17th January 2011.

Proposal for joint railway project with
China and Turkey

During his visit to China at end-October,
the transport minister Alexander Tsvetkov held a series of meetings with the
Chinese minister of transport Li Shenglin, the minister of railways Liu Zhijun
as well as with leading local companies, among which was CMCEC – a leader in
the sphere of infrastructure projects. During the talks the parties discussed
possible Chinese investments in Bulgaria and the establishment of joint
ventures. Minister Liu Zhijun proposed to minister Tsvetkov that Bulgaria get
involved in a Chinese-Turkish project for high-speed railway services. The
trilateral agreement can be signed in December if it is prepared in due time.

Permanent way between Byala and Polski
Trambesh was renewed

Reconstruction works for the railway line
section between the stations Byala and Polski Trambesh were performed for about
40 working days. The railway units in Gorna Oryahovitsa and Pleven replaced 1
500 wooden and concrete sleepers. After 23rd October the trains operate in this
section with 70 km/h (while before the renewal the operation speed was only 25
km/h). Reconstruction works cost BGN 1.325 million.

Conference on intermodal transport

On 26th October the Executive Director of
Executive Agency “Maritime administration” Sergey Tsarnakliyski opened the
first national meeting on the project “Transnational network for the promotion
of multimodal water - land transport” (WATERMODE). The main topic of the forum
was “Intermodal transport – key factor for development in South-Eastern
Europe”. The participants discussed the development of intermodal transport and
container services in the Black Sea region and the optimization of the links
between ports and hinterland.

BDZ EAD is getting restructured into a
holding

In implementation of decision by the
transport minister Alexander Tsvetkov as of 22nd October BDZEAD is getting
restructured into a holding company. The two main business activities –
passenger and freight services – will be developed within the new structure and
all the assets, such as locomotives, wagons and coaches, which are necessary
for their operations will be transferred to them. The mother-company BDZ EAD
will focus upon the strategic management of the company as well as all assets,
which are of no use to the two daughter companies, including rolling stock
which will be either scrapped or offered for sale. Thus, the organizational
structure of BDZ will become uniform with the structure of most European
railways. The main objective thereof is to establish an effective system for
reforms and changes to pave the way for profit-making operations of the
company.

A bill for changes in RTA

At end-October the ministry of transport
published on its website for public discussion the bill that amends and
complements the Railway Transport Act. The proposed changes aim at harmonizing
the act with the European legislation which has been adopted in the transport
sphere in the last few years. These changes concern the rights and obligations
of passengers in railway transport (including sanctions for any lack of
non-discriminative conditions for disabled people as well as compensations for
train delays, lack of information, railway accidents, etc.); certification of
railway rolling stock; free travel of EARA staff when they have to perform
their official duties; the option for EARA to manage under certain conditions
part of the collected charges and fines, as well as some amendments to current
legal definitions.

Sofia – Elin Pelin project will be ready
by end-2010

The technical project for modernization of
the railway section Sofia – Elin Pelin, which is part of the project
“Modernization of Sofia – Plovdiv railway line” (split into three parts),
should be completed by the end of this year. It comes under ISPA programme. As
regards the railway section Elin Pelin – Septemvri, it is expected that the
Environmental Impact Assessment procedure will get launched in 2011 and will be
followed by a tender for selection of designer, which means that the
implementation of this part of the overall project will be most probably left
for the next programme period of Operational Programme “Transport” (2014 – 2020).

Deputy Minister Moskovski met Minister
Landau

The Deputy Minister of transport, Ivaylo
Moskovski, met in Sofia the Israeli Minister of infrastructure Uzi Landau. They
discussed the options for the development of bilateral cooperation, exchange of
experience and know-how. The talks were also attended by a group of Israeli
businessmen, who expressed their wish for potential investments in the
transport infrastructure projects within Operational Programme “Transport”.

Milcho Lambrev met a representative of
JICA

On 5th November the Director General of SE
NRIC, Milcho Lambrev, received the representative of the Japan International
Cooperation Agency (JICA), Mr. Fudjita, and discussed with him issues,
concerning the railway infrastructure and freight services to and from the port
of Burgas. It is common knowledge that JICA funded the construction of Terminal
2 of the port. The Japanese expert was presented with information on other
projects for modernization of Bulgarian railway infrastructure.

Michael Clausecker visited Bulgaria

By invitation of the Railway Automatics,
Telecommunications and Signaling Association (RASTIA), the Director General of
UNIFE (the Association of the European Rail Industry), Michael Clausecker,
visited our country. He met the deputy transport minister, Kamen Kichev, and
discussed with him the options for assisting the Bulgarian railway sector in
the provision of sustainable and safe railway transport services and the
attraction of investments. On 23rd November Michael Clausecker gave a
press-conference in the Head Office of SE NRIC together with Veselin Vasilev,
Executive Director of EARA; Krasimir Krachunov, Deputy Director General of SE
NRIC; Ivan Markov, member of the Managing Board of SE NRIC, and Nikola Durchev,
Chairman of RASTIA.